Senate Republicans are proposing to adopt a new party rule that requires spending cuts in order to raise the debt ceiling – but some are slamming the move as hypocritical, saying Republicans’ position on the matter is in stark contrast to their debt-ceiling record under the Trump administration.
The nonbinding decision by Republicans to implement dollar-for-dollar spending cuts puts them on a collision course with the White House this summer as President Biden seeks to pass his multitrillion-dollar agenda, including his nearly $4 trillion Build Back Better tax and spending proposal.
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“I think that is a step in the right direction in terms of reining in out-of-control spending,” Sen. Ted Cruz, R-Texas, told reporters last week.
Sen. Rick Scott, R-Fla., is also urging his Republican colleagues to support offsetting costs in the debt ceiling with spending cuts.
“I think people agree with me. I think Republicans agree that we have too much debt and that we have to figure out how to live within our means,” Scott told NBC News. “The American public is scared to death of all this debt and what’s happening with inflation.”
But during the Trump administration, Republicans often voted to increase the debt ceiling, without proposing dollar-for-dollar spending cuts in exchange, and with few budget hawks sounding the alarm. During that period, the federal debt surged by roughly $7 trillion. The surge was due, in part, to the 2017 tax cuts and the trillions of dollars of coronavirus relief efforts.
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But even before the coronavirus pandemic, in August 2019, the Senate passed legislation increasing discretionary spending for fiscal year 2020 and fiscal year 2021, and suspended the public debt limit through July 31, 2021. Twenty-nine Senate Republicans voted in favor of the legislation.
“After spending the entirety of the last four years increasing spending along with the debt ceiling – including before COVID-19 came to the U.S. and with a tax giveaway for billionaires and big corporations – their effort to manufacture a needless, divisive, partisan fight over this is flagrantly hypocritical and automatically discredited,” a Democrat involved with economic policy told Fox News.
“It would also threaten the economic recovery with the only tactic that ever resulted in America’s credit rating being downgraded,” the Democrat continued, citing Senate Minority Leader Mitch McConnell, R-Ky., in 2019, saying that it would throw “‘an unnecessary wrench into the gears of our job growth and thriving economy.'”
“American families cannot afford unforced financial pain,” the Democrat added.
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But McConnell did resist pushes for large amounts of additional spending during the Trump administration, and vowed to “never have America default,” even if it’s “unpleasant.”
Congress agreed to suspend the limit until July 31, 2021, when the Treasury Department would have several months to deploy “extraordinary measures” to continue operations until it is left with just the option of default of government obligations, including making interest payments on the national debt.
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The debt ceiling – which is currently around $22 trillion – is the legal limit on the total amount of debt that the federal government can accrue. According to the Committee for a Responsible Federal Budget, it applies to both the $16.2 trillion in debt held by the public, and the $5.9 trillion owed by the government.
Biden and Democrats already approved a $1.9 trillion stimulus bill this year and are pushing for another $2.25 trillion spending plan that would be offset by new taxes on corporations. The debt is on track to surpass $30 trillion this year, while the deficit for the first six months of the 2021 fiscal year surged to $1.7 trillion, a record.
FOX Business’ Megan Henney contributed to this report.